Iran Currency Market Relatively Calm

EghtesadOnline: The rial has been keeping relatively steady since the reimposition of US sanctions last week, a fact reflected in official comments in Tehran that much of the impact of the sanctions have already been baked in.

News ID: ۷۴۶۲۱۰

12 November 2018

On Sunday the national currency gained slightly against the dollar with the exchange rate falling below the support level of 140,000 rials. The rial was traded at 161,000 rials to the euro down from the previous day's 164,000.

Iran's currency market has seen more than its fair share of upheaval in the past months. Governor of the Central Bank of Iran Abdolnasser Hemmati has said his bank's priority is to keep the rial stable in the face of mounting external pressures.

President Hassan Rouhani said last week Iran "will proudly move beyond” the hostile US restrictions that have targeted key sectors of the economy, namely oil exports, according to Financial Tribune.

"I announce that we will proudly defeat your illegal, unjust sanctions because it's against international regulations," Rouhani said.

The Trump administration hopes the tough sanctions it has imposed on Iran's oil, shipping and banking industries will cripple its economy and force it to negotiate a new nuclear deal.

Analysts point out that while such economic penalties can be persuasive, there are ways Iran can circumvent them as it has done for almost the past four decades.

The European Union, that supports the nuclear deal, is looking at creating a system for buying Iranian oil that doesn't use the greenback or run through the American banking system. The so-called special purpose vehicle has yet to take a proper shape and structure because large European companies are afraid to run afoul of the Trump administration.

Earlier this month, the US granted temporary waivers to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey, allowing them to continue buying Iranian oil without consequences for six months.